Slashdot Mirror
Paypal Won't Release Funds To Slain Soldier's Family
robustyoungsoul writes "Popular sports blog Deadspin established the Adam Knox Fund for the purpose of raising money in honor of the fallen soldier who was killed in Iraq. They took the donations through a PayPal account.
Turns out now, however, PayPal will not release the money due to the way the account was set up on their end."
A more accurate summary should have indicated the money is frozen by policy for 180 days. So, paypal is not saying they won't release the money, they won't release it until April 13.
It probably sucks for the people who raised this money, but it also sucks for paypal that too many people set up these kinds of things with intent to defraud.
Hopefully with the noise raised and ruckus caused by sites such as slashdot, the resolution will become before April 13.
FTA:
Hopefully Adam's family and platoon isn't so depleted to not be able to function until April 13. Hopefully if this is so, paypal will figure out a way to disburse earlier.
Meantime, deepest regrets and best wishes to Adam's family for their loss.
The reason why Paypal does this is because creating a charity account without being able to provide documents proving your charity status is suspect. It's a red flag. Another red flag is having a new account suddenly receive a massive amount of funds from many individuals.
To make things clear, the types of accounts that is:
A) New accounts
B) Unable to provide documents
C) Receiving many funds from many separate individuals
If you can't guess already.... accounts created by phishing scams!
The fact that this person is not a phishing scam is a travesty on the part that they were suspended, but the FACT REMAINS that they have no possible means to prove their innocence.
Yes I said prove their innocence. This is a company, not a trial. Likewise, they haven't been found guilty either. The reason for the 180 suspension is obvious:
If the people who sent them money start to increasingly cancel their money payments, then, bingo, the account is a scam. If they don't after a given time, say... 180 days, then hey the account is legitimate.
Paypal sucks, but not in this particular case.
PayPal did the same thing when Dan Savage of the Savage Love sex column took up a collection for charity. PayPal refused to release the funds to him and would only donate them directly to United Way, a charity with a very questionable reputation. Don't take charity through PayPal, people. They're sketchy enough when you're buying and selling like they want you to.
Did you actually read the article? Oh wait, this is slashdot. Of course you didn't. Even the guy's personal blog admits that they will, indeed, get the money, and that they didn't set up their account correctly for this sort of online dontation gathering. I'm really not seeing how this is Paypal's fault. They have to have some safeguards in place to prevent fraud. And this has nothing to do with Paypal not 'wanting soldiers to get their money'; that implies someone actively made a decision to withhold the money on the basis of where the money was going. Sure, maybe they're being a bit inflexible, but that might get worked out in the coming weeks. That has nothing to do with Paypal actively withholding money from soldiers.
The deadspin folks claim that paypal wrongly flagged the account as a charity account, and that they (deadspin) did not ask for the acount to be flagged as a charity account. If that is true, paypal has no right to be witholding the money, and they are also obliged to correct their classification error.
Over the past few years, eBay has been slowly tightening the screws to get people to switch to "Business" accounts (i.e., the ones they get a percentage of every transaction on) as opposed to "Personal" accounts. First they made it so that you couldn't accept credit card payments on your personal account. (OK, fine, credit cards charge fees.) If you received a credit card payment on a personal account, you had the choice of upgrading the account or denying that charge. Then they made it so that you couldn't sell on eBay accepting paypal and NOT take credit cards, which meant you had to get a business account. (Not so fine.)
But what really pissed me off was the fact that, sometime in October 2006, they changed the rules again without bothering to tell anyone. They disabled the Deny button for PayPal payments for eBay auction if you had a personal account designated for that auction, and also made it impossible for the Payee to cancel the transaction! Before I just denied the charge, then sent a bill from the my business Paypal account. But now neither I nor my winning bidders could cancel the transaction! And both eBay and Paypal customer service (the phone support of which has been is a pay call to a call center that's re-routed to India) refused to do anything about it. I finally had to wait until it aged out of the system after 30 days, because I refuse to upgrade with a metaphorical gun to my head.
There was no e-mail or account notice of this on Paypal or eBay, just an update to the Terms of Service buried somewhere on their respective websites.
Thanks a lot, eBay. Way to ensure that GCash has an audience ready and willing to switch from Paypal at the first opportunity thanks to your heavy-handed tactics. Ditto for a GAuction, when it comes...
Lawrence Person (lawrencepersonh@gmailh.com (remove all "h"s to mail)
http://www.lawrenceperson.com/
Recently, my dog and my girlfriend were attacked by a Staffordshire terrier ("pitbull") that was allowed to run off of his lead. Due to the extremely high vet bills for my dog, a friend of mine set up a donation fund and created a new paypal account. I didn't know about it, and then was surprised with a nice gift from my friends to help me through a rough time; it was all very touching.
However, Paypal would not let me associate my bank account with the account he created, since it was already associated with my account. So, we just forwarded the money in my friend's account to my account, where I then moved it to my bank account.
Apparently this set off some red flags for Paypal. They called my friend not once, not twice, but five times, each time asking him to reiterate why he created the account, what the money was for, and why I was putting it in my account. Each time he told them what it was for, why it was set up, linked them to the donation web page, etc., and the next day, they would call him back. Apparently they never made notes of the fact that they called him the previous day.
I'm very glad that I removed the money from my account as soon as possible, Paypal has been known to freeze accounts for various reasons, and it seemed like they were looking for a reason to do so in this case. The thing that I found most odd is that they put you through hoops to speak to a real person over there, but try to do something nice for someone, and they grill you like a criminal in an interrogation room.
If Paypal weren't so ubiquitous, especially among eBayers, I would never touch it again.
No, no, no!
You can receive any amount of money as a gift, and it is NOT TAXABLE. This is why tips are a special category of income. You might think a tip is a "gift" to your server, but the IRS says it's a tip, not a gift, and thus taxable. There used to be these little cards that you could leave on top of your tip that said "This money is a gift, and not a tip". But I don't think they work :)
When you are the one doing the giving, then YOU are the one who has to pay a "gift tax", unless it's under the annual exclusion which is (this year) $12,000 per person you gift. Anything over the annual exclusion goes into the "lifetime estate exclusion" bucket -- so if you pass your estate on to someone after you die, they get to pay taxes on it if the amount of the estate is (this year) $2,000,000 MINUS the lifetime estate exclusion.
WTF does this all mean? These guys can take in $20k and give it to two people without anyone having to pay any taxes at any time. Which is why you were wrong.
If, on the other hand, he gives the full $20k to one person, then $8k is above the exclusion, which means his eventual estate inheritor can now only inherit $1,992,000 tax-free. So he probably still doesn't have to worry, but he shouldn't make this a habit.
I'm not an accountant, but I play one on the Internet!
--Rob
Towards the Singularity.
What I got out of the article is that the guy never claimed to be a non-profit. Paypal classified his account as a non-profit account. So what I got is Paypal screwed up by giving it the wrong classification and is now using their internal SOP's to hold onto the money for an extra 6 months.
The purpose of language is communication, If the idea is clear the grammar ain't important
They were definitely helpful when some miscreant recently got hold of my Paypal login details somehow and transfered several thousand dollars around the world. I had a paypal account handler on the phone within a minute of ringing their (UK) number, she raised disputes on all the items, they were confirmed within 48 hours as problem transactions and they had all been cancelled within 72 hours.
:) Because the vast majority of transactions made were done through the direct debit system, Paypal could not stop them at that time, so we were waiting for them to fail. During this period tho, Paypal preempted themselves and applied a balance readjustment to take into account currency exchange rate changes, giving me over fifty dollars. The direct debits failed, no money actually left my bank account so no funds were needed to be returned, but Paypal point blank refused to admit that the fifty dollars wasnt mine, so by their admission I gained money!
My account was usable again a week later, but that was mainly my fault for cancelling the direct debits and cards linked to the paypal account the morning I discovered the activity, so I had to reset up the paypal - bank account conduits.
Funny thing is, I actually made money from all this
All in all, I have had excellent customer support from Paypal and all the other anecdotal websites around dont match my experiences.